Diesel engine fuel systems which utilize diesel fuel as the primary fuel and a secondary fuel such as propane are well known. Conventionally, dual fuel systems of this sort are employed to increase the horsepower output by the diesel engine. As a general rule, it is undesirable to operate a diesel engine in excess of the maximum rated horsepower specified by the engine manufacturer, since this may cause damage to the engine and/or void the manufacturer's warranty coverage for the engine. Dual fuel systems are nevertheless desirable in that the price of the secondary fuel is typically less than the price of the primary diesel fuel. If a diesel engine can be operated efficiently and within the manufacturer's specifications with a dual fuel system, then significant cost savings may be realized over extended operating cycles when the combined cost of the primary and secondary fuels are taken into account. The present invention is directed to a method of economically operating a dual fuel diesel engine in a manner which optimizes the engine's performance by continually varying the relative amounts of primary and secondary fuel injected into the engine, as a function of one or more performance parameters, whilst adhering to the manufacturer's specifications for operating the engine.